Jacinta Cooper v. City of Toronto
COURT FILE NO.: CV-13-CV-495260
MOTION HEARD: 20191213
REASONS RELEASED: 20200316
SUPERIOR COURT OF JUSTICE – ONTARIO
BETWEEN:
JACINTA COOPER
Plaintiff
- and –
CITY OF TORONTO
Defendant
BEFORE: MASTER D. E. SHORT
COUNSEL: Jillian Evans Fax: 416-364-2188
- Agent for Counsel to the Plaintiff evans@mselaw.ca (Moving Party)
Ara Basmadjian Fax: 416-863-4592
- For the Proposed Defendant ara.badsmadjian@dentons.com Toronto Hydro Energy Services Inc.
REASONS RELEASED: Match 16, 2020
Reasons for Decision
I. Background
[1] This case in many ways reflects Murphy’s Law continues in full force and effect.
[2] I expect the plaintiff, Jacinta Cooper, was looking forward to a Happy New Year as 2012 approached. Instead, she asserts that on New Year’s Eve on December 31, 2011, she was injured while walking in Downtown Toronto as a result of a collision with a street light pole in the middle of the sidewalk near her home.
[3] Little did she know that the internal complexities of Toronto’s municipal budget balancing in 2005 would lead to more than one trip to this Court.
[4] The initial defendant sued by her was the City of Toronto. As will be detailed below several years after the accident the plaintiff was told she should have sued Toronto Hydro. This motion, brought by a city resident, sought an amendment replacing the City of Toronto with Toronto Hydro, on the basis of misnomer. That amendment was opposed by Toronto Hydro.
[5] To put the somewhat unusual fact situation before me, in perspective, I provide these extracts from a 2010 newspaper article dealing with 2005 activity regarding Toronto’s Street lights. The Toronto Star’s Business Reporter, John Spears’ report from February 19, 2010 can be found at: https://www.thestar.com/news/gta/2010/02/19/bill_for_toronto_street_lights_will_top_400_million.html
II. The Hidden Sale
[6] The following are what I regard as relevant extracts (with my emphasis added) from that article:
“Bill for Toronto street lights will top $400 million”
After selling its street lights to Toronto Hydro in 2005 to raise $60 million, the City of Toronto will pay more than $420 million over the next 30 years to rent the lights back, the contract agreement shows.
The controversial contract was obtained by the Greater Toronto Electrical Contractors Association through a freedom of information request – which the city strongly opposed.
Bob O'Donnell, executive director of the association, said the sale is likely a poor deal because no one else was allowed to bid for the street lights.
Toronto Councillor Denzil Minnan-Wong agrees.
"We sold it off in desperation and didn't get a good price for it," Minnan-Wong said in an interview.
The city is Toronto Hydro's sole shareholder. However, through property taxes, city residents and businesses will pay roughly $14 million a year until 2035 to use the street lights.
The agreement lists the annual payment as $13.6 million, but the amount is adjusted yearly for inflation. That means the cumulative payment over the 30-year life of the contract will top $420 million.
[7] The article reports that Mr. Soknacki, who was the city's budget chief at the time. said “the city was summoned to a meeting at Queen's Park a day or two before presenting its March 2005 budget.”
“There, Soknacki said, he was told that provincial funding would be $60 million less than the city had expected. That forced the city to find a quick deal to fill the gap and balance its budget, as required by law. City staff proposed selling the street lights to Toronto Hydro – which the city also owns.
[8] The article continues:
“We were cognizant of the time limitations and the situation we were in,” said Soknacki.
“Was it a perfect decision? Absolutely not. There could have been other decisions that could have been better for the city, had we had the luxury of time to make a decision.”
Contract talks with the city's two big union locals were in full swing at the time, and would have been upset by sudden moves to slash services or staff, he added.”
[9] Mr. Spears further reported on the 2010 release of this 2005 agreement:
“ The city had fought release of the agreement, at one point filing a 32-page legal argument trying to block its publication.
The man who initiated the deal, former councillor David Soknacki, said the agreement contains the best terms available at the time because the city had just been blindsided by the Ontario government.”
[10] The article also asserts:
Soknacki said he asked city staff to analyze the deal Toronto Hydro consultants determined how many lights and utility poles were involved and how much they were worth.
“We asked whether or not it was a good transaction in terms of rates of return as well as strategic direction,” Soknacki said. “On both scores it passed and we were able to recommend it”
Soknacki acknowledged that the decision generated "spirited debate" among the committee during an emergency meeting in the office of Mayor David Miller.
City council approved the deal in a closed-door session .
[11] The current Toronto Hydro Website confirms “Toronto Hydro Corporation's sole owner and shareholder is the City of Toronto.”
[12] It was against that background, that I commenced the drafting of my decision in this case
III. Applicable Rules
[13] This case attracts a review of the general principles contained in the Rules of Civil Procedure:
General Principle
1.04 (1) These rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits.
Proportionality
(1.1) In applying these rules, the court shall make orders and give directions that are proportionate to the importance and complexity of the issues, and to the amount involved, in the proceeding.
Matters Not Provided For
(2) Where matters are not provided for in these rules, the practice shall be determined by analogy to them.
[14] As well, Rule 2 addresses the effect of non-compliance with the Rules:
2.01 (1) A failure to comply with these rules is an irregularity and does not render a proceeding or a step, document or order in a proceeding a nullity, and the court,
(a) may grant all necessary amendments or other relief, on such terms as are just, to secure the just determination of the real matters in dispute; or
(b) only where and as necessary in the interest of justice, may set aside the proceeding or a step, document or order in the proceeding in whole or in part.
[15] However, the court may dispense with compliance when necessary:
2.03 The court may, only where and as necessary in the interest of justice, dispense with compliance with any rule at any time.
IV. History of Plaintiff’s Action
[16] The Plaintiff’s factum files before me, commences:
Jacinta Cooper was seriously injured on December 31, 2011. While walking northbound on the sidewalk located in front of the condominium tower municipally located at 8 York Street (the "Sidewalk"), she momentarily turned her head to look at traffic, and collided with an unlit lamp post that was unexpectedly situated in the middle of the Sidewalk, unaligned with other lamp posts along her route and not in a location where a pedestrian would expect to encounter a pole (the "Lamp Post"). She was 46 years old at the time of these events.
Ms. Cooper alleges that as a result of her collision with the Lamp Post (the "Incident") she sustained, among other harms, a brain injury, concussion and nerve damage to her face. These injuries are alleged to have resulted in amnesia, headaches, numbness, difficulties with memory and concentration and other limitations, and Ms. Cooper has been unable to return to gainful employment as a result.
About a year later, Ms. Cooper retained counsel who proceeded to send notice letters and exchange correspondence with the adjusters and claims examiners for the condominium building at 8 York Street in front of which the Lamp Post was located (the "Condo").
[17] Apparently after an in-person meeting, and the exchange of various letters, evidence, photographs and records, the adjuster for the Condo advised the plaintiff that the City of Toronto owned the Lamp Post, and Ms. Cooper's then counsel went about putting the City on notice.
[18] Over the course of the next three and a half years, the plaintiff or her counsel exchanged correspondence with the City's Clerk, their claims examiner and their legal representatives.. Ms. Cooper and her counsel provided the City with details of the incident, information about changes in location to the Lamp Post, the name of an eyewitness, a photograph of the area in question and particulars of Ms. Cooper's losses.
[19] Despite Counsel Davidson's letters to the City detailing the location of the fall, providing a photograph of the location of the Incident and summarizing the particulars of Ms. Cooper's claim, “at no point over the next forty-three (43) months” (sic), did any representative of the City of Toronto ever advise the plaintiff or her counsel that Toronto Hydro in fact owned the Lamp Post.
[20] With the second anniversary of the Incident approaching, Ms. Cooper commenced this action on December 19, 2013 by issuing a Statement of Claim.
[21] The factum observes:
Given the circumstances of the Incident, it was always Ms. Cooper's intention to sue the party responsible for the unsafe positioning, dangerous condition and unlit state of the Lamp Post." At the time, based on the information available to her and expressly provided to her counsel, she understood those responsible for the aforementioned to be one and the same - namely, the City of Toronto (the "City").
Ms. Cooper issued a Claim naming the City as defendant. Therein, she pled that the defendant City:
i. was responsible for and in control of the sidewalk on which the Lamp Post was situated;
ii. had erected the Lamp Post in the middle of said sidewalk;
iii. in so doing had created a situation of danger;
iv. failed to warn pedestrians about the danger that they had created in erecting the Lamp Post where they did; and
v. failed to adequately inspect, maintain and repair the premises for which they were responsible in safe condition.
[22] Thus, the plaintiff alleged in the Claim that the Lamp Post itself, as well as its positioning on the sidewalk on which it was situated, constituted an unexpected and usual danger for which the City was responsible.
[23] The City responded to the Claim by serving a Statement of Defence on the plaintiff on June 30, 2014. Despite blanket denials of jurisdiction, fault, negligence or breach of duty, the City did not expressly name the entity whom it now alleges has jurisdiction over the Sidewalk or the Lamp Post, nor did they bring a third party claim against any other party (and, in particular, not against what now is seen to be their wholly owned hydro provider).
[24] The factum reports that the plaintiff thereafter retained new counsel, and in December 2016, on the eve of scheduled examinations for discovery, counsel for the City left a voicemail for the plaintiff’s counsel advising for the first time that Toronto Hydro might be an appropriate party defendant to the litigation.
V. First Motion to Add Party
[25] In light of this information, the upcoming examinations for discovery were adjourned, and after receiving the City's "Schedule A" productions in May of 2017 that contained the Asset Purchase Agreement described at the outset of these reasons, confirming that the City had sold the Lamp Post to Toronto Hydro in 2005, the plaintiff served Toronto Hydro with a Notice of Motion on August 12, 2017 seeking to add them to the litigation (the Motion to Add").
[26] The Motion to Add was originally returnable September 7, 2017, and then subsequently adjourned on consent of all parties a number of times before being argued before Master Brott on April 8, 2019.
[27] Master Brott denied the plaintiff's motion to add Toronto Hydro to the existing litigation, and her decision was appealed on May 8, 2019, with the plaintiff advising Toronto Hydro not long thereafter of their intention to bring the within motion to correct the style of cause.
[28] In the circumstances, the plaintiff sought Toronto Hydro's consent to extend the deadline to perfect the appeal of Master Brott's decision to the Divisional Court, so that the within motion could be brought within the next two months.
[29] Toronto Hydro did not agree to the extension, and the appeal of the Motion to Add was heard before Justice Wilton-Siegel on October 2, 2019. 28 His Honour's decision on the appeal was pending when this motion was argued on November 13, 2019.
[30] I therefore drafted these reasons, based upon the then status quo where the addition of Toronto Hydro as a separate party had been denied. The motion was expertly contested by counsel for hydro asserting inter alia that res judicata ought to apply to prevent my now altering the identification of the sole defendant.
VI. Applicable Law
The Law of Misnomer
[31] Rule 5.04(2) of the Rules of Civil Procedure provides that “at any stage of a proceeding the court may by order add, delete or substitute a party, or correct the name of a party incorrectly named, on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment”.
[32] Relatedly, Rule 26.01 provides that, at any stage of an action, the court “shall grant leave to amend a pleading” on such terms as are just, “unless prejudice would result that could not be compensated for by costs or an adjournment”.
[33] Though Rule 5.04 is discretionary rather than mandatory, the Court of Appeal has held in Mazzuca v. Silvercreek Pharmacy Ltd. (2001), 2001 CanLII 8620 (ON CA), 207 D.L.R. (4th) 492 that the "the combined effect of Rules 26.01, 5.04(2) and 1.04(1) is to focus the analysis on the issue of non-compensable prejudice, in the wider context of the requirement that a liberal construction be placed on the rules to advance timely and cost effective justice in civil disputes.”
[34] I accept that while Rule 5.04 does not distinguish between the addition of parties to an action and the substitution or correction of one that has been misnamed, the Limitations Act, 2002 does.
[35] Section 21 (1) of that Act prohibits the addition of a party to an action “if a limitation period in respect of a claim against [that] person has expired.” Subsection (2), however, clarifies that where the amendment sought involves “the correction of a misnaming or misdescription of a party,” no such prohibition exists. Where the amendment sought involves the correction of a misnomer, no limitations issues arise.
[36] Accordingly, neither discoverability nor diligence are relevant to a Court's analysis of whether the doctrine of misnomer ought properly to be applied. The Court of Appeal has been clear: in the case of misnomer "due diligence does not apply". To require that a plaintiff establish when and how efforts were made to identify the proposed defendant, or to prove that they were diligent in those efforts would “conflate the doctrine of misnomer and discoverability, since misnomer applies despite the passage of the limitation period”. [see Skribans v. Nowek, 2012 ONSC 532, at para. 41]
[37] I agree that the two-stage process for a motion under Rule 5.04(2) to “correct the name of a party incorrectly named” thus first involves a determination of whether the proposed amendment is, in fact, a case of misnomer. When such a finding is made, the Court moves on to a determination of whether there is a persuasive reason (beyond from the passing of the limitation period) to discretionarily deny the correction.
[38] The Court of Appeal has in recent years confirmed what is now well-established law: that the Court should consider what a "person having knowledge of the facts" - and even more broadly, any “relevant person” who reviewed the Claim - would understand about the true targets of the lawsuit.
[39] In Spirito v. Trillium Health the plaintiffs successfully moved to substitute the identities of two doctors for defendants named as "Doctors AB,CD, EF and GH" in the original claim, alleging that the doctors' identities only came to light after examinations for discovery. The Court of Appeal at 2008 ONCA 762 upheld and endorsed the motion judge's characterization of the test:
The test for determining whether an amendment is for misnomer or for the addition of a new defendant is whether the "litigating finger" is pointed at the proposed defendant in the Statement of Claim; that is, would a person having knowledge of the facts be aware of the true identities of the misnamed party by reading the Statement of Claim? If so, the defendant will be substituted unless there is prejudice that cannot be compensated for in costs or by an adjournment.
[40] A year later, the Court of Appeal in Ormerod v. Ferner [2009 ONCA 528] validated that motion judge's reliance on the fact that other relevant parties (including the proposed physician's 'representative') "would have known or could easily have ascertained" the identity of the intended defendant. In endorsing the motion judge's approach, Juriansz J.A. highlighted his Court's growing trend towards a more expansive approach to misnomer.
[41] In granting the relief in Ormerod, the Court of Appeal found the intended defendant's insurer to be a “person having knowledge of the facts” who would have reasonably recognized the misnamed party to be the intended target in the litigation. Since then, the courts have gone on to further expand the definition, and "relevant persons" has been held to include other parties involved in or with knowledge of the matters at issue.
[42] Courts have also confirmed that the doctrine of misnomer is not restricted to a "one for one" switch or substitution and can ultimately result in the inclusion of an additional party without removing the original, mischaracterized party should the circumstances of the case call for it.
VII. Alternate Defendant
[43] Having reviewed the submissions of both counsel I was satisfied that the circumstances of the present case lend themselves fully to the well-established misnomer principles in Ontario. It is clear from the Statement of Claim that the plaintiff always intended to sue the party who “had erected the Lamp Post in the middle of [the] sidewalk” and the party who thereafter “failed to adequately inspect, maintain and repair the premises for which they were responsible in safe condition. The position and poor condition of the premises were both squarely put at issue in the pleading. Anyone "relevant person" with knowledge of the facts (particularly the City of Toronto, as sole shareholder and exclusive owner of Toronto Hydro) would understand as much from reading the document.
[44] At the time that she issued the Claim Ms. Cooper and her then counsel very reasonably understood, based on communications with both the City and the condominium corporation, that the City wore both of those "hats." Her intention to sue those “responsible for” the placement, maintenance, upkeep, erection and repair of the Lamp Post is apparent on the face of the pleadings.
[45] The target (or targets) of her lawsuit would have been apparent to the relevant parties like the City who were "in the know" and aware of the both the contractual and shareholder relationships as between Hydro and the City. The Plaintiff did not at the time the Claim was issued know that while the City was liable for the placement of the Lamp Post on the municipal street, a second corporation owned and maintained the Lamp Post. The City did not disabuse them of this misunderstanding for nearly 4 years. Once they did, the plaintiff brought a motion seeking to add this corporation within months.
[46] Likewise, as in Stekel v. Toyota Canada, 2011 ONSC 6507, there is a "unity of interest" between the City and Hydro in this case, with Hydro being owned by the City. Moreover, the City of Toronto, as the sole originally named defendant specifically defended the plaintiffs' claims for negligent maintenance-all without disabusing the plaintiffs of their mistaken belief.
[47] Ultimately, I was convinced that, taking into account the totality of the circumstances in this case, there was no prejudice to Toronto Hydro warranting a denial of the misnomer correction.
[48] I was satisfied that the evidence established that despite its age, this action remains at its early stages. Examinations for discovery have yet to proceed,62 as they were suspended the moment Hydro's potential responsibility for the Incident was revealed, and Hydro would thus be able to participate fully in the process should they be brought into the proceeding when their identity is corrected.
[49] For their part, Toronto Hydro has not put forth any evidence that they would be prejudiced should the misnomer correction be granted, despite being uniquely positioned to do so. In fact, they did not appear as alleged by plaintiff’s counsel “to have alleged any prejudice at all.”
[50] In Abarca v. Vargas, 2015 ONCA 4, the Ontario Court of Appeal recognized that the factual, legal and procedural complexities that arise in tort actions with multiple defendants “can accumulate quickly” when “in many cases the full range of potential claims is not entirely clear at the outset and almost invariably evolves.” Under these conditions, taking various steps to organize and regulate the.proceedinq can result in “claims procedures that are related but can be out of sequence.”
VIII. Murphy’s Law
[51] Based upon the foregoing, and further analysis that need not now be included, I was prepared to grant the relief sought on behalf of the plaintiff.
[52] As noted earlier the decision of my colleague declining to add Hydro as an additional defendant was appealed
[53] Virtually on the eve of releasing this decision, I determined to ensure that the appeal was still under reserve.
[54] Regrettably, I was advised that the appeal was allowed for reasons release December 23,2019.
[55] As a consequence. the Plaintiff now has an action with both parties as defendants
[56] While this decision is thus moot, it occurred to me that if Justice Wilton-Siegel was appealed this finding might become relevant.
IX. Disposition
[57] The Plaintiff is entitled to the relief sought, if it becomes necessary.
[58] Her submissions in the factum filed included these paragraphs:
While a parallel, "in the alternative" motion for this distinct relief could have been brought before Master Brott in April, 2019 when the motion to add Hydro was argued, the plaintiff's efforts to now remedy a misnomer is not an abuse worthy of denying her relief to which she would otherwise be entitled.
To the extent that Hydro will argue that the plaintiff's decision to proceed in this manner amounts to a wasteful abuse of both their counsel and the Court's valuable time, it is worth noting that the proposed defendant vigorously resisted the plaintiff's suggestion that the appeal of Master Brott's order be adjourned on consent until after the Court could decide the present motion.
Instead of agreeing to have the within misnomer motion argued in July, and consenting to a brief extension of the deadline to perfect the appeal pending the outcome of same, they insisted that that appeal be perfected and argued before the within motion could proceed, the outcome of which may well have obviated the need for Justice Wilton-Seigel's time.
Principles of proportionality ought to be considered when allegations of abuse of process are raised. Even where ostensibly abusive behaviour is found, the dismissal of the action is not the default remedy.
[59] In my view this is one of the rare occasions where the Plaintiff ought to be entitled to Costs on a Substantial indemnity basis.
[60] If the parties are unable to agree upon a form of order or an appropriate costs award, I may be contacted in order that an appropriate protocol can be established for submissions by the parties.
Master D. Short
Released: March 16, 2020
DS/ R311